Nutt v. United States
2016 U.S. App. LEXIS 16644
| Fed. Cir. | 2016Background
- In 1985 the Nutts settled an FTCA wrongful-death claim: the United States agreed to purchase annuities (to pay specified annual and lump-sum amounts) and to pay certain lump sums immediately. The settlement stated those payments would be "full and complete discharge."
- The Government purchased an annuity from Executive Life (ELNY); ELNY went into receivership in 1991 and later reduced benefit payments to about 45% of expected amounts; anniversary lump sums ceased.
- In 2014 the Nutts sued in the Court of Federal Claims, alleging the Government breached the settlement by failing to guarantee and pay the scheduled annuity and anniversary payments.
- The Court of Federal Claims granted summary judgment for the Government, holding the Agreement obligated the Government to purchase annuities and pay certain lump sums, but did not obligate the Government to guarantee future annuity disbursements.
- On appeal, the Federal Circuit reviewed the contract language and relevant FTCA/sovereign-immunity principles and affirmed the lower court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement unambiguously required the United States to guarantee and pay future annuity disbursements | Nutt: the Agreement's language (e.g., "shall be paid") obligates the U.S. to ensure full payment of all scheduled future and anniversary amounts | U.S.: Agreement required only purchase of annuities; payments thereafter are the insurer's obligation | Court: The plain language obligates the U.S. to purchase annuities and pay specified lump sums, but does not guarantee future annuity disbursements |
| Whether the FTCA or Appropriations/sovereign immunity restricts structuring damages as future/installment payments | Nutt: parties can agree to structured/periodic payments | U.S.: FTCA permits only lump-sum payments absent explicit congressional authorization | Court: Periodic awards can be permissible by agreement, but here sovereign-immunity concerns support requiring an unequivocal promise to guarantee payments, which is absent |
| Whether Massie v. United States compels finding a government guaranty here | Nutt: Massie shows government can be found to guarantee annuity payments under similar settlements | U.S.: Massie is distinguishable (different statute and facts) | Court: Massie is distinguishable on its contract language (Massie contained explicit guarantee language); it does not require a different result here |
Key Cases Cited
- OPM v. Richmond, 496 U.S. 414 (1990) (Appropriations Clause limits payments from the Treasury to express statutory terms)
- FDIC v. Meyer, 510 U.S. 471 (1994) (FTCA waives sovereign immunity for certain torts but limits remedies)
- Reilly v. United States, 863 F.2d 149 (1st Cir. 1988) (periodic damage awards permissible by statute or by agreement/annuity arrangements)
- Vanhoy v. United States, 514 F.3d 447 (5th Cir. 2008) (refused reversionary trust but acknowledged parties’ agreement can justify periodic awards)
- Massie v. United States, 166 F.3d 1184 (Fed. Cir. 1999) (interpreting contract language to require government guarantee where agreement expressly guaranteed annuity payments)
- Amergen Energy Co. v. United States, 779 F.3d 1368 (Fed. Cir. 2015) (summary judgment standard de novo review)
- Barseback Kraft AB v. United States, 121 F.3d 1475 (Fed. Cir. 1997) (standard of review for contractual interpretation on appeal)
- Coast Fed. Bank, FSB v. United States, 323 F.3d 1035 (Fed. Cir. 2003) (plain contractual language controls; extrinsic evidence unnecessary when unambiguous)